Now this sounds like a homework question but I hope I’m thoroughly on the wrong track?!
Basically, human activity can be broken down into two component parts, producing and consuming. Factors of production is obviously to be found in the former. When there is production a procedure of conversion takes place. Inputs are converted into an output. Collectively theses inputs are called factors of production.
There are four components in the factors of production that are widely agreed upon. Namely these are land, labour, capital and organization/entrepreneurship.
Without land it is very difficult to produce wealth and includes not only the site of production but natural resources above or below the soil. With nobody to work it’s hard to produce things, capital is vital to starting businesses (remember you have got to speculate to accumulate) and if you’re unorganized, well nothing is going to get done now is it?
In economics, factors of production are any commodities or services used to produce goods and services.
These principal factors enable production but do not become part of the product (as say with raw materials) nor become considerably transformed by the production process (like with burning fuel to power machinery).
Which factor is the most important? Phew! That depends who you ask and whose theoretical stance you most align with. Differences are most stark when it comes to deciding which factor is the most important. Marxists for example see labour as the first and foremost factor of production as they believe it is essential to produce capital goods and to utilize the gifts of nature, but then they would wouldn’t they?
Some people reckon the state of technology is now also factors of production but in its most basic and classical definition, it can be ignored, but closely check the theoretical angle that you’re expected to come from.
Basically, human activity can be broken down into two component parts, producing and consuming. Factors of production is obviously to be found in the former. When there is production a procedure of conversion takes place. Inputs are converted into an output. Collectively theses inputs are called factors of production.
There are four components in the factors of production that are widely agreed upon. Namely these are land, labour, capital and organization/entrepreneurship.
Without land it is very difficult to produce wealth and includes not only the site of production but natural resources above or below the soil. With nobody to work it’s hard to produce things, capital is vital to starting businesses (remember you have got to speculate to accumulate) and if you’re unorganized, well nothing is going to get done now is it?
In economics, factors of production are any commodities or services used to produce goods and services.
These principal factors enable production but do not become part of the product (as say with raw materials) nor become considerably transformed by the production process (like with burning fuel to power machinery).
Which factor is the most important? Phew! That depends who you ask and whose theoretical stance you most align with. Differences are most stark when it comes to deciding which factor is the most important. Marxists for example see labour as the first and foremost factor of production as they believe it is essential to produce capital goods and to utilize the gifts of nature, but then they would wouldn’t they?
Some people reckon the state of technology is now also factors of production but in its most basic and classical definition, it can be ignored, but closely check the theoretical angle that you’re expected to come from.
